Oil rebounds as traders search for cheaper energy sources than gas

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Oil prices rose today, Friday, as inventories fell in the largest Storage center in the United States, amid an energy crisis that has prompted foreign buyers to look for cheaper barrels.

US crude futures in New York rose above $83 a barrel, erasing a decline at the beginning of the session, as the dollar slowed, while global benchmark Brent crude gained more than 1%, rising above $85.

While core prices have been volatile over the past two sessions, the market structure has risen with Cushing’s stocks falling towards very low levels. Meanwhile, Saudi Arabia said this week that any additional oil from OPEC+ would do little to tame higher natural gas prices.

Oil is close to ending the week on new gains, after a sharp rise supported by the global energy crisis.

“Oil’s rise due to the energy crisis could face further stumbles, but it is hard to see it evaporate without a major catalyst,” said Vandana Hari, founder of Vanda Insights.

She added that price fluctuations indicate increased tension, as technical indicators point to the overbought area in crude oil, according to what was reported by “Bloomberg”.

US crude rose to its highest level since 2014 this week as the energy crisis – caused by shortages of coal and natural gas – coincided with the economic recovery from the pandemic.

The shortage of natural gas has increased demand for crude oil, but high gas prices also threaten to erode the profits some oil refineries make from the fuel, forcing them to reduce processing rates. Gas, especially methane, is a key ingredient in making the hydrogen that oil refineries rely on in diesel production machines, helping to remove sulfur.



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